With a renewed focus on self care and healthy living within the last few years, many are fully committed to a new wellness lifestyle making time away from work and stress a top priority. And what better way to refresh and administer self care than with a vacation?
Eagerly meeting this demand, resort properties are on the rise with a plethora of new developments that continue to expand and evolve in both their services and business models. With more options than ever, people are flocking to vacation properties with hotel and timeshare opportunities dominating the resort property landscape.
And the numbers are strong. Last year, investments in hotels reached $68 billion globally and are expected to continue to grow steadily this year. Timeshares have seen similar success with a forecasted growth of 7.05% CAGR through the year 2023. U.S. occupancy rates for hotels in 2018 was 65.9% while timeshares saw a boom with 81% and an even higher rate of 90% for island resorts.
Why Resort Properties are Finding Success
Contributing to the success of resort properties are both baby boomers and millennials. With many baby boomers well into retirement, they are looking to spend their time and hard-earned money on amazing trips and relaxing getaways. While traditionally timeshares were dominated by an older demographic with the median age of an owner being 51 years, now, the younger generation of millennials are investing in timeshares.
To entice and gain the business of this new, younger generation, resort properties are quickly evolving to meet new standards and needs. Hotels and timeshares alike are adding new technologies like guaranteed high speed internet and many are now allowing guests to connect their phones to the televisions in their rooms.
Evolving for a New Generation
In the age of influencers, travel bloggers, and social media, resort properties must invest in Instagram-worthy amenities and conveniences. Millennials are willing to pay more for memorable experiences, especially if it will look good on their social media. According to a study from Wyndham Destinations, one of the leading players in the timeshare industry, more than one-fifth of timeshare shoppers would actually buy a timeshare based on its Instagram-worthiness.
Willingness to shell out more money for one-of-a-kind or extravagant experiences worthy of social media may also account for the increase in luxury accommodations. In 2018, luxury hotel business increased by 76% with more resort properties catering to this trend showcasing exotic day trip offers along with unique art and interesting design giving each guest’s room its own distinct personality.
As hotels and timeshares compete for the new generation’s business, they are also competing for land and space to expand both in the states and internationally. With less prime locations to build, the costs for land, labor, and government approvals are soaring. For instance, investors wanting to develop timeshares are looking at spending 50% of the sales value upfront just for marketing the timeshare.
Both hotels and timeshares are also competing with third party vacation rentals like Airbnb and must focus on growing internationally. Certainly, hotels are better equipped in this area and can more easily accommodate both high-end luxury clients and cost conscious travelers in the U.S. and abroad. Timeshares may still struggle with affordability, but they have adapted to customer needs and offer owners more flexibility with opportunities to use their timeshares in more than one location so they won’t be stuck in the same spot year after year.
With both hotels and timeshares working to meet the needs of a new consumer, it’s likely we’ll see even more resort properties evolve and expand as the demand for more exclusive, one-of-a-kind getaways and experiences continues to grow.